Update #1/ Week of August 3, 2009

Good Morning Everyone and Happy Monday! There’s plenty to read about in the financial section of today’s newspaper, beginning with the previously discussed Cash for Clunkers programs that has been a wild success for auto makers. Although it only occurred in the last 5 days of the month of July, it is being credited as the “vehicle” for success (pun intended) for Ford’s report this morning of it’s first year-over-year (albeit only 1.6%) sales increase in 20 months! Ford stock is up almost 6.5% on the news.

The ISM Manufacturing Index came in at 48.9 for July, encouragingly close to the 50 mark which represents expansion. A number below 50 represents contraction, but with June’s index at 44.8, July’s number is a big move in the right direction. Construction spending for June report came in with a rise of .3% surprising analysts who were looking for a .5% decline. May’s number was revised to a .9% decline. Of course, this is Summer and ‘tis the season for construction, but both of these reports are obviously giving the equity markets a big lift today. In Chicago, as the saying goes, there are only 2 seasons . . . winter and construction (usually in reference to the roads).

The NASDAQ has crested the 2000 point level, and the S&P has topped 1000 for the first time this year. Treasuries are getting pounded, but the MBS’s are doing much better holding their own. This week should be a good week for MBS’s as there is little competition in the credit markets. As long as the equity markets do not continue to rise, as they have so far, then money will seek safe haven of MBS’s . . . that’s the plan. J Our pricing this morning is almost identical to the pricing of Friday morning before the improvement of the afternoon. SO, the losses aren’t bad.

I’ll be in the office all day today. Call me here or better yet email me with your pricing or loan scenario questions. Have a terrific Monday and a very profitable week!